ENKAI PROPERTIES LTD

Executive Summary

ENKAI PROPERTIES LTD demonstrates a stable and improving financial health with positive net assets and working capital, underpinned by increased investment in fixed assets. The company’s main financial challenge lies in managing significant long-term liabilities prudently to sustain solvency and growth. Overall, the outlook is cautiously optimistic, provided debt management and equity strengthening strategies are actively pursued.

ENKAI PROPERTIES LTD - Analysis Report

Company Number: 13138935

Analysis Date: 2025-07-20 15:57 UTC

Financial Health Assessment for ENKAI PROPERTIES LTD (As of 31 January 2024)

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1. Financial Health Score: B-

Explanation:
ENKAI PROPERTIES LTD shows a generally stable financial condition with positive net assets and improved working capital over the last year. However, the presence of significant long-term liabilities (creditors due after more than one year) and modest net assets relative to these obligations introduce some caution. The company’s financial "vital signs" indicate recovery and growth but also symptoms that require careful management to maintain financial wellness.

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2. Key Vital Signs:

Metric	2024 Value (£)	Interpretation
Fixed Assets	217,120	Significant increase indicating investment in long-term property assets, typical for real estate.
Current Assets	126,227	Healthy increase, suggesting improved liquidity and asset base.
Current Liabilities	75,832	Current debts are manageable relative to current assets, showing positive short-term liquidity.
Net Current Assets	50,395	Positive and improving working capital, signaling good short-term financial health.
Creditors > 1 year	208,002	Large long-term liabilities needing monitoring to avoid liquidity strain.
Net Assets	59,513	Positive net worth, showing the company’s equity buffer after liabilities.
Shareholders’ Funds	59,513	Matches net assets, reflecting ownership equity.
Number of Employees	2	Small team consistent with micro-entity status, indicating lean operations.
Share Capital	100	Nominal share capital, typical for a small private company.

Interpretation:
The company exhibits "healthy cash flow," with current assets comfortably exceeding current liabilities. The substantial increase in fixed assets suggests expansion or acquisition activity, which is often positive but can increase financial risk if financed by debt. The long-term creditors represent a significant liability "symptom" that requires close attention to avoid distress.

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3. Diagnosis:

ENKAI PROPERTIES LTD is currently in a stable financial condition typical for a micro-entity in the real estate letting sector. The company has successfully grown its asset base, particularly fixed assets, while improving liquidity and working capital. This suggests a phase of investment or property acquisition aligned with its business model.

However, the presence of long-term creditors totaling over £200,000 is a "symptom of financial strain" that could impact future flexibility and solvency if not managed prudently. The net assets, while positive, are relatively modest compared to the size of these liabilities, indicating a moderate equity buffer.

The company’s governance and control structure appear sound, with clear director appointments and multiple persons with significant control, which can help in decision-making and financial oversight.

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4. Recommendations:

• Monitor Long-Term Debt: Implement regular reviews of repayment schedules and cash flow projections to ensure the company can meet its long-term creditor obligations without jeopardizing operational liquidity.
• Enhance Equity Buffer: Consider strategies to strengthen shareholders’ funds, such as retained earnings growth or additional capital injections, to improve solvency and reduce leverage risk.
• Maintain Working Capital Vigilance: Continue to manage short-term assets and liabilities carefully to preserve the positive net current asset position, ensuring operational flexibility.
• Financial Planning for Asset Growth: Ensure that further fixed asset acquisitions are supported by solid financing plans, balancing debt and equity to avoid over-leverage.
• Regular Financial Reporting: Maintain timely and accurate financial reporting and compliance with filing deadlines to avoid penalties and maintain stakeholder confidence.
• Risk Management: Given the real estate sector’s sensitivity to market fluctuations, implement risk assessment procedures focused on tenant creditworthiness and market trends.

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